How Is the ‘Security Budget’ of a Blockchain Defined?
The security budget of a blockchain is the total economic value the network spends to secure its ledger. It is primarily defined by the total block rewards (newly minted coins and transaction fees) paid to miners or validators.
A higher security budget means a higher cost for an attacker to compromise the network, as they must outspend the rewards to maintain a malicious chain.
Glossar
Security Budget
Allocation ⎊ Within cryptocurrency, options trading, and financial derivatives, a security budget represents the strategically designated financial resources allocated to safeguard assets and operations against potential threats.
Total Economic Value
Valuation ⎊ Total Economic Value, within cryptocurrency and derivatives, represents the aggregate worth derived from an asset or strategy, encompassing not just immediate price discovery but also ancillary benefits like liquidity provision and risk transfer.